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Gree Electric Appliances announced that the Chinese home appliance giant will not be increasing the prices of its air conditioners or switching from copper to aluminum at this time, despite the recent surge in copper futures prices.
The company issued a statement yesterday following its Chairwoman’s comments last month, clarifying that they have been researching aluminum technology for years. She emphasized that aluminum will only be used in air conditioners once it meets the same technical standards as copper.
At the end of last year, copper futures surpassed $10,000 per ton, leading many appliance manufacturers to raise their prices. For instance, Meibo Air Conditioning increased prices by 5 percent in December, and other major brands have raised their prices by 2 to 4 percent since the beginning of the year.
An industry executive explained to this publication that recent price increases for some air conditioners are primarily due to rising copper costs, with raw materials reaching around CNY 100,000 (approximately USD 14,330) per ton. They noted that the cost of a single unit has increased by roughly CNY 80 to CNY 90 (about USD 11.50 to USD 12.90) over the past three months.
Given Gree’s strong brand premium and high profit margins, industry insiders suggest that its decision to hold off on price hikes is likely a strategic marketing move. An expert from Samyou Environmental Technology remarked that Gree’s stance of not replacing copper with aluminum currently reinforces its reputation as a high-end, premium brand.
China has a limited supply of copper and is heavily reliant on imports, as copper makes up roughly 40 percent of an air conditioner’s cost. The Ministry of Industry and Information Technology proposed last year to replace copper with aluminum, highlighting the use of aluminum tubes in heat exchangers for refrigerators and air conditioners as a key focus.
Recently, Wanbao partnered with JD.com to introduce China’s first aluminum air conditioner, which is priced between CNY 999 and CNY 1,199 (USD 143 to USD 172)—about 20 percent cheaper than comparable models with copper components.
However, replacing copper with aluminum raises concerns about reduced reliability, according to Xiao Youyuan. While aluminum use could lower retail prices, some brands struggling to grow sales may find a significant drop in revenue unsustainable.
From a technical standpoint, the industry has developed solutions to ensure aluminum’s heat transfer performance is comparable to copper. Huang Ruiyin, a researcher at the Aluminum Corporation of China’s aluminum application research institute, noted that recent innovations have made the heat exchange efficiency of aluminum alloy tubes on par with copper.
Considering the cost differences—copper at CNY 100,000 per ton versus aluminum at about CNY 22,000 (USD 3,150)—and the fact that aluminum typically accounts for only around 60 percent of the weight of copper, substituting aluminum can lead to substantial cost savings, Huang explained.
Japanese conglomerate Daikin Industries plans to utilize aluminum alloy tubes in half of its air conditioners, and many window units exported from China to North America already employ aluminum tubes. Modern technology has also extended the lifespan of aluminum-based air conditioners by 50 or even 100 percent through advancements in alloy composition, surface coatings, and manufacturing processes, Xiao added.
Despite these developments, the long-term reliability of copper remains superior. The increased manufacturing costs associated with aluminum mean companies must balance performance with affordability.
The application of aluminum in air conditioners is relatively mature, according to an industry expert. Although aluminum will not completely replace copper due to market competition, the integration of both materials is expected to grow rapidly in the coming years.
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